Chesapeake Nets $2B Refi Commitment


Chesapeake Energy Corp. has secured a $2 billion term loan financing commitment from banks that it will use to repay existing debt, the Oklahoma City-based company said today.  

Bank of America Merrill Lynch, Goldman Sachs, and Jefferies are arranging the unsecured five-year term loan facility.

The oil and natural gas producer intends to use the proceeds from the loan to repay an existing term loan facility arranged in May 2012, as well as borrowings under its revolver.

This will enhance the company’s liquidity and financial flexibility as it continues with its strategy to sell assets and will allow the future repayment of higher cost debt, the company said in a statement.

“The board and management believe current corporate loan market conditions offer attractive refinancing opportunities on favorable terms,” Archie W. Dunham, the company’s non-executive chairman, said in the statement. “By using the proceeds of this loan to repay more costly debt and provide excess liquidity, we will enhance our financial flexibility and ensure our ability to complete our planned asset sales efficiently.”

It is not clear yet what the interest rate will be for the new loan, but the company’s executives want to repay existing expensive loans with rates above 6%.


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